Netflix price drop? | Technology news
Netflix Inc. plans to create a lower-priced version of the service with ads after years of offering only free movies and TV shows.
Netflix Inc. plans to create a lower-priced version of the service with ads, a major change for the company after years of offering only free movies and TV shows.
Co-CEO Reed Hastings raised the advertising potential during a call Tuesday with investors, after Netflix reported a loss of 200,000 customers in the first quarter – the first decline in a decade – and forecast to drop another 2 million this quarter.
Netflix has built its streaming business into a streaming company with nearly 222 million customers globally. However, subscriber growth has stopped, and revenue for the most recent quarter, up 9.8% to $7.87 billion, fell short of Wall Street forecasts. Netflix also estimates that more than 100 million people watch the service without paying.
“Anyone who has followed Netflix knows that I am against the complexity of advertising and am a big fan of the simplicity of subscriptions,” Hastings said on the call. “I’m more of a fan of consumer choice and allowing consumers who want lower prices and are subject to advertising to get what they want, makes a lot of sense.”
Hastings said the company will work on creating an ad-supported version of the service within the next year or two.
Shares of Netflix fell 27% to $256 in extended trading after the streaming leader reported poor-than-forecast financial results and said it expected a third quarter. two consecutive customer losses.